How to retire from the United States to Canada

The idea of retiring in Canada is appealing to many Americans seeking an affordable and picturesque locale for their golden years. And Canada can help you stretch your U.S. dollar as far as it can go while avoiding the, well, oft chaotic politics of the United States.

But, retiring from the United States to Canada is not as simple as many people think. In this article, we’re going to walk you through the most important considerations for retiring from the United States to Canada. From immigration to taxes, healthcare to climate, this is your go-to guide for retiring in Canada.

Visiting vs Immigrating Permanently

One of the most common questions we hear from U.S. citizens looking to retire in Canada is, “How do I immigrate to Canada for retirement?” The answer is a little bit tricky.

Rather than immigrating to Canada permanently, the easiest route for retirement-aged people is usually to live in Canada part-time, as a visitor.

To immigrate to Canada as a permanent resident, you have to go through an official immigration program. Canada’s main immigration programs for permanent residents are designed for:

1. those with a close family connection in the country, like a spouse or parent;
2. skilled workers with the demonstrated potential to contribute to the Canadian economy; or
3. refugees and humanitarian cases.

You might be thinking that you’d be a good skilled worker candidate, but if you’re nearing retirement age, this impacts your eligibility. Age is a big consideration for most skilled worker immigration programs, giving preference to younger workers who will be able to contribute to the economy for years. This makes it challenging to qualify for such programs when approaching retirement age.

It’s not impossible to gain permanent resident status in Canada when you reach retirement, but it is challenging. Instead, you may want to consider living in Canada part-time as a visitor. However, if you want to learn more about the possibility of permanent residence, check out our guide breaking down the basics of Canada’s immigration options.

As a citizen of the United States, you are eligible to travel to Canada for up to six months at a time, without giving any advance notice or submitting an application. Simply show up at the border, whether by land or air, and come enjoy your stay! (Some would-be visitors may have to overcome criminal inadmissibility in advance of their travel to Canada.)

As a visitor, you can still own property in Canada, so you can spend part of your time at your Canadian home, making sure you exit the country at least every six months so you don’t overstay your visit.

One of the most important distinctions between living in Canada as a visitor and immigrating permanently is in your access to healthcare coverage.

Access to healthcare in Canada

Canada has a publicly-funded universal healthcare system. This might be one of the reasons why you’re considering the country for your retirement. However, just because you’re inside Canada, doesn’t mean you automatically have free access to the healthcare system.

In order to have the cost of your healthcare services in Canada covered by the publicly-funded system, rather than out of your own wallet, you need to have a certain type of immigration status in the country.

Visitors do not qualify to have the cost of their medical services covered by the publicly-funded system. For this reason, if you choose to live in Canada part-time as a visitor, you’ll want to ensure you have private medical insurance. For excellent quality of coverage, we recommend the company Cigna: you can get a free quote here.

Citizens and permanent residents have the cost of their basic medical services covered automatically through the taxpayer-funded system (although for new permanent residents it can take a couple of months for this coverage to kick in). Medical services beyond the basics (including many dental services) often are not covered by the public system, so some citizens and permanent residents opt for additional medical insurance through their employer, their school, or a private company.

Those in Canada on temporary work permits or study permits have varied access to public coverage depending on a few different factors. As it’s unlikely you’ll be retiring on a work or study permit, we won’t cover that here, but you can get more information in our detailed guide.

Paying Taxes

For a more comprehensive look at U.S. tax considerations for Americans moving to Canada — check out this guide!

As a citizen of the United States, you have to file your income tax return with the U.S. annually, regardless of where you live in the world. The question remains whether or not you have to file a Canadian income tax return as well. This depends on whether or not you are considered a resident of Canada.

The definition of “resident” is a little bit different for the purposes of taxation than it is for the purposes of immigration. For taxation purposes, the following factors will be considered in determining whether you are or are not a resident of Canada:

• you normally, customarily, or routinely live in another country and are not considered a resident of Canada; or
• you do not have significant residential ties in Canada; and
• you lived outside Canada throughout the tax year; or
• you stayed in Canada for less than 183 days in the tax year.

If you opt to purchase a home in Canada and live in the country on a part-time basis as a “visitor,” it can become tricky to determine your residency classification and tax obligations. You can investigate this in advance using the Canada Revenue Agency’s guide so you are not surprised by tax requirements.

As a U.S. citizen living in Canada, there are several tax regulations that may benefit you and help you to avoid paying income tax in both countries. Some of the regulations to be aware of include:

• The Foreign Earned Income Exclusion (FEIE) which allows you to exclude upwards of $100,000 of annual income from U.S. income tax if you reside in Canada for at least 330 days per year (so, visitors would not be eligible).
• The U.S.-Canada Tax Treaty which may enable you to recoup some of the income tax paid on your Social Security benefits if you are required to pay income tax to both countries. Learn more about the U.S.-Canada Tax Treaty here.

You may also have obligations to report your Canadian bank accounts in your U.S. taxes. You can learn more about your obligations to report foreign accounts in your U.S. taxes in our detailed guide — here.

All in all, be sure to determine your residency classification and tax obligations ahead of time so you aren’t surprised when tax season hits you with a one-two bilateral punch.

Read more: Retiring in Canada from Another Country: What You Need to Know

Choosing a place to live: Cost, climate, and culture

Once you’ve gotten through the monotony and detail of navigating systems of immigration, healthcare, and taxation, it’s finally time for the fun part: choosing the place to make your Canadian home!

Canada is a huge country, even larger than the United States, so take your time in choosing where you want to live, because the costs, climate, and culture can vary dramatically from location to location. We suggest using our Destination Guides to compare different possibilities across the country.

When determining where you want to live, it’s useful to consider cost, climate, and culture.

Cost of living in Canada: The cost of living, especially around affordability of housing, is predictably high in Canada’s major cities: Toronto, Vancouver, and (to a lesser extent) Montreal. So, if you’re looking for a big city life, bear in mind that this might cost you. However, if you’re looking for a quiet retirement in a smaller town or cottage country, you can find something more affordable (although real estate for lakeside and oceanside property can be, understandably, quite costly).

Climate: Depending on where you live in the United States, you might be used to some snow in winter, but are you used to Canadian winter? Winters in Canada can be frigid and harsh, although the climate depends on your geographic region.

As a general rule, the mildest winters occur in the Vancouver region in the province of British Columbia, where only a couple of light snowfalls are expected each year. On the other coast, in the Maritime provinces, winters are harsher than in Vancouver, but usually milder than the rest of the country. And, if you’re planning on riding out winter in any other part of Canada, make sure you get a proper toque (winter hat), jacket, and boots.

If you want the best of both worlds, you can join the ranks of the Canadian snowbirds, spending your summers in Canada and heading back south of the border for the warmer U.S. winters.

Culture: From the friendly demeanour of folks on the East Coast, to the French-language flavour of Quebec, all the way to the adventurism of ski villagers in the Rockies, “Canadian” culture will depend on where you live. The best way to know if you’ll like the culture of your preferred location is to pay a visit. So, get that luggage out of the closet, dust off your passport, and come find out what the life you’ve imagined in Canada is really like.

If you choose to make Canada a part of your retirement plans, there are some other things to consider as you prepare for your move. We suggest checking out our top 10 things you need to know when moving from the United States to Canada.